HUMAN RESOURCE MANAGEMENT AND INNOVATION

PERFORMANCE IN ORGANIZATIONS

Abstract
The highly dynamic and competitive business environment compels organizations to find new ways of ensuring
the competiveness and success. A solution to these problems is adopting innovation as the main part of the
organizational culture. A major driver for innovation is human resource and for innovation to be successful
managers needs to support, plan and nurture an innovation culture. The research results presented in this paper
approach the aspects related to the human resource management and its implication in the innovation
performance in an organization. There is an obvious relation between innovation performance and human
resources, more than that some activities in human resource management have a direct impact on the innovation
process, the main activities have been identified and presented in this paper. It is important to recognize why
success through human resources can be sustained and cannot readily be imitated by competitors. The reason is
that the success that comes from managing people effectively is often not as visible or transparent as to its
source.

Keywords: innovation, human resource management, business performance, innovation performance,

innovative organizations, human resource framework.

1. Introduction
Successful management of innovation implies a strategic approach both of the innovation and also of the issues
related to its management, it involves the use of the effective implementation mechanisms and structures, it
requires the development of an organizational culture that supports innovation and also involves maintenance
and development of effective external links (Maier, 2014).
The success, performance and competitiveness of any organization depend in a large extent to the content and
quality of human resources management because, as emphasized by many experts, an organization's competitive
advantage lies in its people.
People are a shared resource and a vital resource equally to all organizations, no matter where they operate,
resource to ensure the survival, development and success of their competition. Without the actual presence of
people who know what, when and how to do it is simply impossible for organizations to achieve their goals.
Organizations exist because people have limited physical abilities and intellectual, but also the ability to develop
organization (Covrig, 2007).
To meet the challenges of globalization and to ride the rapid waves of change, the future managers both
generalists and human resource specialists have no choice but are effective human resource managers with
high qualities. They must be intelligent, knowledgeable, skilled in human resources management and
organizational behavior, able and willing to learn and lead learning organizations, and capable to create human
capital and work with people on an equal basis, not as authoritative leaders over them (Farazmand, 2004)

2. The Activities of Human Resource Management that Support Innovation

The link between human resource management and innovation performance of organizations is a theme
developed in many publications, especially in recent decades. In the 90s, many studies have focused on "new
practices in human resource management" a global label put on a series of changes regarding: the organization
of labor relations (including teamwork, leadership decentralization and empowerment of employees), continuous
learning, access to information, internal knowledge dissemination, rewarding performance etc. (Laursen& Foss,
2000, 2013;Chen & Huang, 2009).
These practices diffused quickly becoming distinguishing features of modern management, essential for efficient
use of human resources and adaptation to the requirements of a flexible organization and continuous learners
(Nielsen, 2006). According to Nielson, "issues related to employees is part of the innovation system and, from
this perspective, development of the skills and learning are important" (Nielson, 2006).
In studies on the implementation of new models of innovation is underlined the increased responsibility of
human resources specialists in building organization capabilities that generate competitive advantages
(Altmann.a., 2011; Truss .a., 2012; Mazor.a., 2015).
Human resource management must develop and sustain organizational and social transformations necessary to
achieve the objectives of innovation. For this purpose, human resource leaders must understand the critical
importance of innovation and how it can help to improve the innovation performance of the organization. The
main specific activities of human resource management with direct effects on performance in innovation (Fig. 1)
are:

Fig. 1 Activities of human resource management that support innovation (Source: Popescu, 2016)
The first activity is employees empowerment: it refers to increasing the employee autonomy, opportunities and
activities influencing their own work context. Creating innovation opportunities for each employee by
incorporating innovation into job requirements and performance management tools is essential. Access to
information, providing resources, support the work and development opportunities are also means of
empowerment.
The second activity is the staff recruitment and selection: organizations must incorporate creativity and other
important innovation skills among the criteria for recruitment and selection of staff. When organizations are
involved in innovation they need people that are creative, flexible, risk-taking and have the ability to work in
teams.
Other activity is innovation training: considers widening and improving the knowledge, including training in
innovation management, development of creativity and entrepreneurial skills. Innovation performance depends
on employees knowledge therefore the development of extensive and long term programs is an essential
component of innovative organizations.
Rewarding the innovation performance is another activity that supports innovation. The organization must
develop an incentive reward system that encourages innovation. Introducing stimulus packages to reward
performance can help increase employee motivation and involvement in innovation.
Another activity is staff involvement: creating the framework for employee participation in finding solutions and
innovation projects. Participation can be individual but representative teams are considered key elements of
innovation processes. In both cases, it is important to develop employees communication skills, which facilitates
interaction with peers and encourage the transfer of new ideas within and between work groups.
An activity that is very important to the success of innovation is communication and wide access to information:
development of an open communication system to facilitate broad access to information, collaboration and
teamwork. Communication plays an important part in the management of innovation in the context of
enlargement of the contribution to innovation and interdependence of the involved structures, being conducted in
specific forms within project teams, but also in the organization, leadership, the flow of creation and
development of new products / processes, to disseminate results etc.
Developing an innovation culture is an activity that contributes to the innovation. Development of an
organizational culture which supports innovation is seen as the responsibility of every employee. Each of the
changes related to human resource issues listed above affects performance in innovation, but to maximize the
results these should be viewed not as isolated actions, but addressed as a system.
As it can be seen in Figure 1 all these activities support innovation without standing out a certain one, all of them
work together as a whole and each of them contribute in various amount in different stages of innovation
process. In this perspective a helpful tool for managers can be a framework for developing human resource for
innovation.

3. Framework for developing human resources for innovations

The Knowledge embedded in human capital allows companies to improve their skills and discover distinctive
innovation opportunities. When companies develop new products and improve the management processes, they
need motivation and human capital capable to produce creative ideas, develop innovative approaches and pursue
new opportunities. Operation of human resource management can influence and change the attitudes, skills and
behaviors of employees to achieve organizational goals and plays a crucial role in fostering the conditions
necessary for catalyzing and channeling of individuals towards the development of innovation activities (Chen,
2009; Maier, 2013). To become an organization's competitive advantage, innovation must go beyond isolated
actions phase. Innovation management defines a new management paradigm, characterized by the systematic
innovation based on specific rules and methods.
To get to the actual performance of an organization (Maier, 2013) it proposes a framework for developing
human resources for innovation (Fig. 2). The objective of this framework is to provide for all managers a clear
picture of the existing capacity of human resources for innovation and the opportunities to develop this capacity
in order to improve the organization's ability to innovate, thus increasing its chances of success in the current
very dynamic and competitive business environment.
Innovation through development of human resource begins during the selection of human resources, where it is
necessary to identify individuals with innovative capabilities. In an organization it is important to have people
who can think "out of box" so that the organization can benefit from innovation. In the process of recruiting
people are necessary observations to see if people are curious, if they are stuck in one point of view or are
willing to consider other points of view, whether they are open to ideas and new concepts, knowing these issues
can also help, and plan ways in which their skills can be improved. The desire for lifelong learning, openness
and thinking differently to things must be present in human innovators.
To be successful in innovation managers must accept, plan and nurturing an innovative culture. The ability to
help create, protect and build organizational culture is critical for human resources. The most powerful force in
business is the organizational culture. Creating an innovative culture is a complex process that must be
implemented from the top level of the organization to the bottom level.
Another important aspect in developing human resources for innovation is the reward system. A right system of
rewards offers a powerful force for strengthening the commitment, dictates the professional growth of employees
and shape corporate culture to be more innovative. Human resources departments need to look at the
mechanisms of reward and ask if things are necessary for employee development and organization culture. These
should include: compensation strategy, performance management tools and other programs targeted for
recognition and reward.

Fig. 2 Framework for developing human resources for innovation (Source: Maier, 2013)

A key element in the successful organization of innovation by developing human resources lies in how the
learning system is created. Managers should have the answer to "What should I do for business employees to get
what they need?" and then to help employees achieve that behavior. This could mean options to increase self-
awareness, a deeper understanding of the context, to assess links between the new behavior, business results and
personal implications, this having few abilities to achieve this behavior changing by using systems as peer
support - coaching, mentoring, etc. The goal is set as well as the destination, they will create the path for
themselves. They will create a learning path that will lead to sustainable positive changes in behavior (Searle,
2012).
Innovation and human resources management have an increasing role in support of completeness for
organizations in times of rapid change and increased competition. Discontinuous change requires discontinuous
thinking. It is important to note that successful innovation through human resources can be easily held and
cannot be imitated by competitors. The reason is that the success coming from managing people effectively is
often not a visible or transparent process on its source.
Human capital is unique in terms of potential growth and development, people's ability to know its own
limitations and defeat, to face new challenges or demands of the present and future. Human resources are
valuable, rare, difficult to imitate and relatively irreplaceable. People have the potential to create material and
spiritual goods capable of meeting the new requirements or to respond better to old requirements. People design
and develop goods and services, controls the quality, allocate resources, make decisions and establish or develop
goals and strategies. The managerial decisions in human resources interconnect individual organizational and
situational factors. It may vary from one country to another, from one organization to another, from one
organization subdivision to another because the relative importance of functions or activities of human resource
management is not same in all situations.
The human resource decisions must consider the moral and ethical fundamental principles, to reflect the
accepted socially values system and the moral development stage in the organization. Respect for the individual,
mutual respect, procedural fairness, transparency, honest communication, fair treatment, fair competition, special
consideration, responsibility to the organization, respect for the law, respect the personality of the people all
these must be pillars for the process of making a management decision in human resources. Human resources are
strongly influenced by the time factor needed to change the mentality, customs and behavior. Here is where the
practice of management must intervene to overcome the relative inertia to change people and transforms into
openness and adaptability to different situations.
From the perspective of human resource management, the issues of groups which people are attached and the
whole procession of interpersonal relationships, communication, socio-emotional and microenvironment
constitutes the reference framework for training and manifestation of personality potentiating employees and
their creative valences. Relations manager - subordinates must rely constantly on respect for human dignity.
Thomas Murphy, former president of the company General Motors said that "we must try to treat people the way
we want and we like to be treated ourselves: it will be good for the individual and the organization". As dignified
human beings, people have the right to be treated decently and their personal needs cannot be met without
promoting a suitable human resource management. J.K. Galbraith announces "human resource revenge on other
resources". It is what happens today, when human resources management has differentiated, specialized, having
a well-defined place in general management, borrowing from it concepts and methods but, equally innovating,
proposing their own language expression, own concepts, new methods of investigation, thus drawing its borders,
so that the organization realities to be dealt according to pursued objectives (Covrig, 2007).
Qualification of employees is, on the other hand, a means of reaching to innovation because is indispensable for
the implementation of further innovation. On the other hand, the qualification is the result of innovation when
technological and organizational changes take place in employee qualification profile. The development of
human resource primarily aimed at a learning process consistently targeted with the content adapted to new skills
and the required qualifications. A training needs assessment (analyzing the current situation of work) usually is
the starting point of any type of management oriented to training.
By assessing training needs is made the employee orientation towards solving the problems that they have
through training. Thus, the issues and the work situation are analyzed and measures to implement training
become possible. Based on training needs assessment can be define the training objectives. Based on the training
objectives the needed programs, content and tools are established. A fundamental element in the training process
and implement it holds transfer knowledge acquired in a work situation, the applicability of the results of the
training constitutes the main factor in a successful training (Perdomo-Ortiz, 2009).
The employees of a certain company are the largest richness" because they bring in the company skills,
knowledge and experience that impact business performance and the achievement of business goals. The central
issue related to human resources in organization remains the yield and performance of each employee at his
workplace. Employee performance is tested by an average market exchange, they must always be aware of the
latest technological breakthroughs with customer demand, the standards of new products or processes,
management techniques or with government regulations and EU, the financial of business ones, health and safety
rules etc. On the other hand, customer requirements and market manifests itself in a continuous changing
(Perdomo-Ortiz, 2009).

4. Conclusions
The organizations success in innovation strongly depends on the skills and involvement of people as key factors
in innovation processes. Organizations can influence and develop the individual and group skills and behaviors
favorable to innovation through specific human resources management, aiming for: finding, hiring and fostering
innovation talent, developing creativity and skills in innovation for all staff, promoting entrepreneurship and
rewarding performance, creating an innovation-friendly culture etc..
Innovation depends on the people, their ability to generate knowledge and ideas and apply them to their
workplace and in society. Current trends on the human dimension of innovation can be summarized as the
performance of innovation organizations in connection with new practices in human resource management
related to: the organization of labor relations, lifelong learning, access to information, knowledge dissemination
internal rewarding performance etc.; according to specialists, human resource management should be an engine
for innovation; developing a culture conducive to innovation is a complex process and takes place in parallel
with the implementation of appropriate structures, open to change and new tools for managing innovation. The
key to success is communication, training and personnel training.
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